Thursday, April 13, 2006

St Paul Ford Plant to close

Ford officials confirmed the St. Paul plant's planned closing, along with the closing of a truck plant in Norfolk, Va., at noon today.

"The decision is final. The plant will be idled in 2008. That is the time frame," said Ford spokesman Dave Reuter. He added that the precise date for shuttering the St. Paul facility has not been determined.

Ford won't pursue an offer made this past winter by Gov. Tim Pawlenty and the local union to locate an alternative fuels research facility in Minnesota. State officials had hoped the offer would entice Ford to keep the St. Paul plant open.

"I will tell you that we did give all those proposals serious consideration and we certainly appreciate all the governor's efforts in terms of those discussions," Reuter said.

Imagine coming into work and being blindsided with that news.

Some 1,885 workers are employed by Ford in St. Paul. The UAW's current contract runs into 2007, and calls for idled workers to still receive pay and benefits.

"I can't comment beyond 2007, but I can tell you that we are working with the UAW, which will help our employees through this transition period," Reuter said. "This may involve some retirement, some educational and some separation packages. But it's a little bit too soon to get into those specifics. What I can tell you is that we will act with sensitivity and compassion."

Workers arriving at the St. Paul plant this morning received notices about the plant closing from union offiicals. The union mistakenly told workers that Ford would shut the plant in 2009.

Something in me says that the 2009 misquote was intentional. Now the workers will find out the target is 2008 and think they are getting the double-shaft because Ford is killing the plant and then moving up the date. In fact, I bet if you had a microphone planted in there today you'd hear them saying Ford lied to them about 2009.

There is bigger trouble for Ford in the future.

Like General Motors, Ford is restructuring in a desperate attempt to salvage its ailing domestic auto operations. Ford saw its North American auto operations lose $1.6 billion in 2005. The company announced a major restructuring in January in which it said it would shut 14 plants; only five were identified immediately. The company said then it would announce two more plant closings before year end.

By 2012, between 25,000 and 35,000 workers -- roughly one of every four at Ford in North America -- will lose their jobs as the company whittles production capacity by 1.2 million vehicles to reflect its eroded market share.

Ford's U.S. market share, 24 percent in 1990, ended 2005 at 17.4 percent, excluding its luxury brands, the lowest since the late 1920s.

Ford officials have said their market share slide is continuing this year, though at a slower pace.

"So far this year, our U.S. share decline has been half of what it was a year ago," unit head Mark Fields said at the New York International Auto show this week. "That means we're making progress on slowing the rate of decline, which is the first step toward stabilizing it over time."

Quality...if they had been producing quality and efficiency at better prices they would not be hemorrhaging their market share. Now why would they not be able to have better prices? Hmm, could it be the incredible amount of overhead known as union scale wages? I think so.

Notice that the industries with stronger unions (airlines, automobiles, baseball) are having problems maintaining costs which are killing their industry? (OK, baseball has other issues, too.)

Well, perhaps the unions have overplayed their hands years ago at the detriment of their futures...which is now.

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